South Korean crypto boss to be extradited to U.S. over multibillion-dollar fraud

The businessman was said to have been in Singapore when his business collapsed before he fled to Serbia.

Olumayowa Samuel • December 27, 2024

Do Kwon

A Montenegro court has approved the extradition of Do Kwon, the co-founder of Terraform Labs based in South Korea, to the United States over the collapse of two digital tokens: TerraUSD and Luna.

The cryptocurrency entrepreneur is alleged to have committed fraud, which caused innocent investors to lose about $40 billion of their funds when TerraUSD and Luna collapsed in May 2022.

The country’s Ministry of Justice, in a statement, said, “The Minister of Justice, Bojan Bozovic, issued a decision approving the extradition of the accused, Kwon Do Hyung, to the United States of America.”

“It was concluded that the majority of the criteria prescribed by law favour the extradition request from the competent authorities of the United States of America,” it added.

According to the ministry, Mr Kwon had earlier agreed to be extradited to both South Korea and the U.S.

The court made the decision after 18 months of rulings and reversals due to Montenegro not having extradition treaties with the U.S. or South Korea, both of which have been contending to secure Mr Kwon’s extradition for months.

Chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, had, in a statement in February, said Mr Kwon and his company were charged with “orchestrating a multi-billion dollar crypto asset securities fraud.”

According to the charge, Mr Kwon falsely claimed to investors that their tokens would increase in value while misleading them about the stability of TerraUSD.

“Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for Luna and TerraUSD,” the charge stated.

Mr Kwon’s arrest and subsequent extradition came after Interpol, in September 2022, issued a “red notice” warrant for his arrest.

The businessman was said to have been in Singapore when his business collapsed before he fled to Serbia. He was later arrested in Montenegro in March 2023 as he attempted to board a flight to Dubai at Podgorica Airport in Montenegro.

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